Seller definition

A seller is a market participant who offers a financial instrument for sale. The seller can be a trader, an investor, a dealer, or an institution, and the instrument can be a share, a forex pair, a commodity, an option, a futures contract, or a CFD.

A seller acts in one of two ways. Selling to close exits an existing long position and banks the result; selling to open creates a short position that profits if the price then falls. In a quote, a seller's offer sits on the ask side, the price at which a buyer can buy.

A seller is the opposite side of a buyer, and every trade pairs one of each at the agreed price. When sellers are more aggressive than buyers, supply outweighs demand and the price tends to fall. Traders watch where selling concentrates, such as at resistance or on a breakdown through support, to read likely direction.

Seller Example

You own 100 shares of a stock you bought at USD 40.

The price rises to USD 45 and you sell the shares.

You are the seller in this trade: you offer your shares to a buyer at the USD 45 execution price, which closes your long position.